and darrell waltrip took me to task. >> dana: they are better than the nra when it comes to that stuff. >> dana: bob? >> bob: the gay marriage ban voted in california by the voters is challenged in the courts. briefs are filed. i am happy to say. i appreciate that 75 prominent republicans signed briefs to overturn the gay ban. right thing. it will help your party. >> eric: boxers or briefs? >> bob: you are just in the tank for nascar. don't tell me about boxers or briefs. >> greg: the biggest news, episode nine of bachelor was last knight and interesting development. ashley frasier one of the three women who refused ini havation t toihavation to the fe and she was eliminated.

the flaw is you should haven't a capital letter in middle of your name. beautiful woman. very sweet. >> dana: is that how it is on your birth certificate? >> greg: i haven't seen it. >> andrea: don't you think she is the next bachelorette? >> greg: i do. she has a story. >> dana: i was busy doing my online class i started op monday about american heritage. >> greg: that is delightful. >> dana: i have to. go i might to my one more thing tomorrow. it's about a guy that put in a paid death notice of the "new york times." his family placed the ad. he said i love -- he loved everything about new york except for the "new york times." gave us a chuckle before he left. rest in peace. >> greg: do it tomorrow. >> dana: i was confused. i thought they were telling us to go. bye. >> bret: the president in virginia uses campaign style

speech to try to force change to sequester. the speaker of the house uses a different speech to achieve the same result. this is "special report." ♪ ♪ >> bret: good evening. i'm bret baier. perhaps the clearest way to tell we are closing in on another self-imposed washington fiscal deadline, the number of speeches and interviews given by both sides. the specific words chosen. he said get off your kiester and do something about the automatic cut in spending growth set to kick in friday. president obama chose to drive home the point in a different way. miles from washington, d.c. ed henry has the toptory

tonight -- top story tonight. >> reporter: one day after the homeland security secretary claimed the sequester could make us vulnerable to terrorist attack, president obama took the fear factor on the road to newport news, virginia. where nuclear attack submarines are built to warn this region is about to take a major hit. >> the sequester could cost jobs in virginia. if it goes in effect, more than 2,000 college students would lose financial aid. >> he took on john boehner by name saying he took tax revenue off the table to protect the rich. or corporate jet owners who are doing well and don't need the tax loopholes to avoid

laying off workers. >> claiming they should get harry reid to pass one of two house bills to block forced cuts. >> so for 16 months the president is travelling all over the country holding rallies instead of sitting down with senate leaders in order to try to forge an agreement over there in order to move the bill. >> we moved the bill twice. we should not move a third bill before the senate gets off their ass to begin to do something. >> reporter: the president put pressure on boehner to bring the local republican congressman aboard air force one where congressman told reporters in addition to spending cut he favors raising revenues through tax reform. >> a republican with me today. it's not always healthy for a republican but he is doing it

because he knows it's important to you. he asked them to continue closing the tax loopholes instead of letting the tax cut go through. >> but boehner got air cover from mitch mcconnell who blasted the president's approach. >> he refused to offer a reasonable alternative and he threatened to veto other proposals aimed to avert the sequester. and now here we are, with the president presenting the councilmember with two options. armageddon, or tax hike. >> another republican put revenue on the table and senator lindsey graham. he met with the president, both he and senator john mccain said the meeting went well. but no deal. bret? >> bret: senator pat toomey of pennsylvania and james inlove of oklahoma. thank you for being here. senator inhof, first to you.

what does this bill do? >> we made a decision a month ago if nothing happens on the sequest tration, the president is successful in getting all the cuts across the board, my major concern is that we would use the same top line to say all right, chief of the military, make decisions. what can you do rather than the straight pure cuts across the board that would be less damaging that they would -- the first response was we could do that. if we didn't have to live with cuts but the numbers would be the same. the same reduction, same top line. we could within that make changes to make it less painful for the military. so that was it. that was a month ago. i talked to the chiefs that time who said yeah, we could do it in a month and doing it. >> bret: in defense and nondefense, right, senator toomey? >> right. this government doubled in size since 2000. spending grown enormously. we need the discipline of beginning to reduce spending. at least the rate of growth. that is what we talk about here. i want to make sure we get

spending cuts but if a smarter fashion. so senator inhof and i agree to do and work with other colleagues on a bill to give president discretion to make the least disruptive cuts possible. but you know, in the $3 $3.6 trillion budget, plenty of waste. they can find it. >> bret: this is what we call transfer authority to give the both, the defense, nondefense, and the president, the administration the ability to move this money around. here is what the democrats are saying when asked about this possibility. take a listen. >> let's assume the president was given flexibility. i think the first place he would look at the defense authorization bill, the reason as i understand that mccain and others come out against this, gives the white house more power than they have now. >> bret, anyone who tells you that there are easy off-ramp here is not being straightforward. >> that idea to me sounds like rearranging the deck chairs on the titanic instead of keeping the boat from sinking.

i don't think the problem is reachanging the spending. the problem is avoiding 750,000 people losing their job. >> that is not true. i'm the ranking minority on the committee. we spend a lot of time, senator mccain is right there, coming up with the bill. what our bill does is says you are going to use the same guidelines as are in the bill, defense bill, and so we are using in this bill the work that has been done. it's not that way at all. that was a change that took place. it's still a work in progress. the bottom line is this, bret, we have the military people who can take that same money to do better with it. that satisfies those and i think it's the best there is. >> bret: we started this tonight, with senator manchin.

couldn't come up -- there is pressure here. are there democrats ready to sign on to this? how does the democratic position work? >> the democrats are divided. we are having discussions with democrats to recognize that, you know, when you have to cut spending, it probably makes them happen in the least painful way rather than doing arbitrary across-the-board way. we are making progress. time will tell whether we get -- >> i just talked to senator from west virginia. he very receptive to this idea. with the way the senate looks. democrat plan first before they are committed to a republican plan. the two democrat senators from virginia. huge losses take place, if you are just talking about the cuts across the board. if they can get in there and prioritize that, it must be less painful. >> bret: i want you to listen to the president today.

and you heard some of it. but another sound bite from the president today in virginia. >> there are too many republicans in congress right now who refuse to compromise even an inch when it comes to closing tax loophole and special interest tack breaks. that is what is holding things up now. >> bret: that is what is holding it up? >> for obamacare, dozens of tax increases on every american. the enof the year. massive tax increase. president obama insisted on now. what do we hear? more taxes. he wants more taxes for more spending. and we're not interested in that. we need the spending discipline. we can do it in a smarter fashion. giving president flexibility is what we are trying to accomplish. >> bret: senator democrats passed a sequester replacement out of committee. but move to the senate floor. they passed that on the senate floor? >> no, i don't think so. if they had be able to pass

it, it would have been on the senate floor. they have control of what goes on the senate floor. every time i see the president talk about the taxes, all he talks about is increasing taxes. that's what pat toomey led off with we don't have a tax problem. too high taxes now. we can do this. this is a way, quite frankly, you can cut a lot of spending that we otherwise wouldn't cut. we just want to do it in a smarter way. >> bret: how much pain is this going to cause if we get there -- it looks like we are going to get there. if your bill doesn't work, lite look like we'll get there. >> we are talking about 2.5% of government grown by 100%. >> bret: i get that. we talked about that for a week. >> no question. >> bret: but you hear all that has been talked thereabout the white house and the administration. how painful -- what is the reality? >> i can tell you how painful on the military and the defense part. you heard what leon panetta said. he said it would be de

stating. first, under this president they made cut of $87 billion in ten years. this would be another one. if they don't adopt what we're talking about. another half trillion dollars. half trillion dollars would come out. coming out of the places where we can look at it from a military perspective and not just straight across the board. >> bret: it's how the sequester is implemented. not the number. >> right. that's right. >> roughly 2.3%. out of a giant pie. >> that is authorizing 2.3%. some of it is spent over many years. it's really about 1% of all federal spending this year. does anyone think this government can't find 1% of the spending? savings? >> bret: last thing, the next battle because this is how we have been operating lately is the continuing resolution. do you think there will be republican unity on how to deal with funding the government? >> i hope so. i hope we agree we're not

going to go a dime above the level that has been established. look, we running trillion dollar deficits. $16 trillion in debt. this is unsustainable. we have to begin to get it under control. >> the c.r. you are talking about is addressed in this bill. the only thing that makes defense different from domestic president cut half a trillion out of the bill. that's why, that is my major concern, that is my area of interest. >> senators thank you very much. welcome senator manchin if he will come on as well. >> thank you. >> do you think the republicans and democrats will come together to to solve sequester impasse? let me know on twitter. follow me @brettbaier. despite what you may have heard it turns out the taliban is not in deep decline. up next, american born college educated and middle class. is this the new profile of an al-qaeda terrorist?

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>> bret: you may have a mental image of what an al-qaeda terrorist looks like but if you want an accurate image look in the mirror or around your work place or house of worship. catherin herridge tells us about the new profile of a terrorist. >> 20 years since the first world trade center attack which killed six and injuried 1,000, this investigative report shows the face of domestic terrorism is changing. the new generation of al-qaeda operative is made in the usa. >> future attack against the american homeland will be less well organized, less complex, less likely to succeed and more likely to be conducted by citizens or long-term residents of the united states. >> the report by a british based think tanks had 171 individuals committed of

al-qaeda related offenses. most operatives are american citizens, relatively young, under 30. they are essentialcated here and they have skilled jobs. >> they have pharmacists, financial analyst, they have not been marginalized by system that passed through it. >> the number of homegrown peaked in 2009, the year of the fort hood massacre, the trend line is unpredictable. by example, since november 30, at least seven or less operatives arrested or prosecuted or pled guilty to federal charges. that is a case of domestic terrorism every other week. in recent confirmation hearing the president pick to run the c.i.a. acknowledge the threat is serious and evolving. >> any element associated with al-qaeda has as part of the agenda death and destruction. we need to be mindful of the me tastization of the cancer. >> this is timely after the

intelligence committee renewed demand for access to the secret legal memos that justified the targeted killing of american cysts overseas. >> bret: thank you. >> you're welcome. >> to paraphrase mark twain reports of the impending death of the taliban have been greatly exaggerated. it turns out the narrative from the u.s. -led military coalition in afghanistan the insurgent group stageed fewer attacks on coalition troops last year was wrong. national security correspondent jennifer griffin tells us what that means. >> the pentagon using misleading figures about the war in afghanistan and how well it is going. >> this is a regrettable error indy the base system that was discovered in a routine quality check. we are making the appropriate adjustments. the assessment is positive. >> the u.s. -led military coalition in afghanistan incorrectly reported a decline in taliban attacks last year. reporting attacks were down by

7%. a fact that drove the obama administration narrative the strategy was working allowing u.s. troops to come home early. >> i don't know of any overt action to cook the books if you will in afghanistan. but everyone i talk to testifies to a subtle pressure. on the part of commanders in the field to shape the narrative in afghanistan as positively as they can. >> the coalition corrected the "clerical errors" removing without explanation the monthly reports from last year on trends in security and violence. it now turns out that the number of taliban attacks in 2012 was flat compared to 2011. did not represent 7% decrease. despite report to congress to the contrary. u.s. officials repeated claims otherwise. violence levels have been trending downward in the last two years after five year of steady increase in 2006. >> unfortunately the

statements by the it was character weren't true. somebody forgot to include afghan security force data because they didn't send if report from the battlefield. >> bret: jennifer griffin, live at the pentagon. thank you. secretary of state john kerry told young germans today in america, you have the right to be stupid. kerry was trying to make a point about tolerance. the secretary told of a usefu useful, un -- [ inaudible ] when his father was in berlin. still ahead, why residents of a cape cod community are willing to pay handsomely to stop using green energy. plus, clearing the hearing. two of the president's cabinet picks head to finish line. my wife takes centrum silver. i've been on the fence about it. then i read an article about a study that looked at the long term health benefits of taking multivitamins.

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>> bret: jeff sessions says the healthcare overall will increase unfunded liabilities by $6 trillion in the next 75 years. he is citing report from the government accountability office. he is recalling a promise from the president that the law would not add one dime to the deficit. new jersey's chris christie is the eighth republican governor to approve an expansion of medicaid under obama care. on screen are the other states with the republican governors supporting expansion. this follows a similar decision by senator rick scott. christie says thousands of new jerseyens will receive health insurance and the state will save money. the federal government will pick up the bill for the first three years. the president is closer tonight to filling up the second term cabinet. two controversial nominees came up for senate votes today

and both advanced. mike emanuel has results. >> chuck hagel was confirmed as defense secretary despite the lackluster performance in front of the senate armed services committee and controversial comments he made about irap and israel. the vote was 58 to 41 with democrats and four republicans backing him. today, the number two ranked republican crushed his former colleague. >> there is simply no way to sugar coat it. senator hagel performance before the senate armed services committee was inept. we should not install defense secretary who is not qualified for job. >> in case colleagues were considering make hagel wait longer a democrat warned one day it will be a g.o.p. president's nominee. >> i say to the republican friends, just be careful. i say this with respect. some day the friends on the

other side. 71 senators voted to end debate. the former white house chief of staff budget director jack lew's nomination brought up for consideration. i'd half o ahead of the vote, they talked about the money and benefits earned when he wasn't in government. >> paid his salary and mortgage and paid a substantial $685,000 severance payment. the reason is still unclear. >> he was approved by the committee 19-5. >> lew is likely to be confirmed later this week without much drama. widening down the afghan war among key issues he will face. >> mike emanuel live on the hill. thanks. federal reserve chairman ben

bernanke urging congress to replace sequester with gradual deficit reduction. he briefed the lawmakers today on the monitor policy. he gave no indication he will abandon low interest rate policies that he says are key to supporting the american economy. while he continues to struggle with high unemployment. consumer confidence is up this month. after three straight months of decline. home prices rose 7% in december. 7.5% for the year. the dow gained 116 today. s&p 500 was up nine. nasdaq finished ahead 13. no grapevine tonight. when we come back, another state, another fight to cut taxes. why it did not work in nebraska. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle.

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>> bret: monday we told you about the national trend of states reducing personal income taxes. tonight is nebraska. william la jeunesse reports on a bold idea that may have been too bold. >> by most account, nebraska's economy is strong. with america's second lowest unemployment rate. yet governor dave hineman wants to eliminate personal income taxes. >> today we compete in a national and global economy. to that extent, capital is mobile. tall sent more mobile. and you have to be prepared to

compete in that environment. >> special interest from churches and hospitals to manufacturing and agriculture oppose the plan. the negative impact that come from the tax proposal. >> weeks after asking the legislature to act boldly, tucked tail and withdrew the measure. >> there was a sense in the state we were moving quickly. >> given a choice of eliminating the 4.5% incomes rate for business, lawmakers cited with lobbyists. >> for farmers and ranchers it would have meant having it on irrigation and fuel, water. machinery. a huge increase. >> he lost a once in a lifetime opportunity.

>> moving to round two. the legislature doesn't want to move as quickly as i do. we'll move forward with tax reform. >> the moment may have passed. he will a lame duck perhaps focused on open senate seat. 2014 will be election year for half the legislature. as the nebraska experience shows, tax reform on any scale isn't always about economics or polls. political clout. bret? >> it seemed like a good idea at the time. one massachusetts town willing to pay big bucks to undue what sounded like a very good idea. correspondent molly on the expensive winds of change. >> they were intended to produce green energy and savings but they have application and tuition in the community and may be removed as a high cost as the neighbors complain of noise and illness.

>> maybe the jet engine allowed. >> neil anderson live a quarter mile from turbine and say the impact on the health is de stating. headaches, dizziness. sleep depravation. >> if the blade is in a downward motion it gives off tremendous force of energy. as a pulse. >> the first turbine went up in 2010. by the time both were in place, the price was $10 million. officials say taking them down will cost estimated $5 to $15 million. in addition to the lost energy savings. but that is just what the local officials decided to move toward doing. >> the turbines are being run and only operating in the day, as they respond to concern of neighbors which means they are operating at a loss. it's been a bitter three-year battle in the town where the officials argue the project was thoroughly vetted,

researched and put to a public vote multiple times. >> if we take it down it will be embarrassment. >> they say that they were granted renewable energy credit and received advice. >> they have been involved and have a tremendous stake in the process. but for the work of the mass clean energy center continuing to press them to take advantage of the wind resource , provideed technical assistant to conduct feasibility studies. >> now the matt her go to a town meeting in april and can ultimately end up on the ballot in may. when the town officials say voters face a difficult decision whether or not to raise taxes to help pay for removal cost. bret? >> molly, thanks.

>> pope benedict will be known as emeritus pope upon the retirement thursday. they have been calling him p papa ameritus. he will be referred to as the holiness, benedict xvi. after the election of a new pope two men will have the title "holiness" at the same time. another day closer and deeper in debt. sequester. the efforts to stop it. the fox all-stars are next with the policy and the politics. ♪ (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line,

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across the country it will force prosecutors to close cases and let criminals go. air traffic controllers and airport security will see cutbacks and that could cause delays at airports across the country. >> now the president says we can't have any progress on

this sequester unless we get second tax hike in eight weeks. that is not compromise. then he says your choice is going to be taking criminals off, letting the criminals out of jail and on to the street. >> talking about the sequester. it's $84 billion cut to future federal spending. this is a pie chart for the budget for the year. this gives you perspective. this is as of this week. $16.609 trillion. a year ago it was 15.4. debt added in last year $1 $1.19 trillion.

that is $3.26 billion a day. $136 million an hour. $2.27 million a minute. that comes down to $37,829 a second. $37,000, almost $38,000 a second. our panel, byron york. a.b. stoddard. associate editor of the hill. columnist charles krauthammer. that is how we start the jo joyois panel. >> be careful. we are spending so much money. >> you waisted $60,000 by the preamble.

>> the republicans decided this is going to happen. it's in the law. they are not going to change it. we know the effects won't be felt. furloughs require 30-day notice so they won't happen until the first of april. then we are going to see how they make the case. >> bret: a.b., i want the read things telling ed henry, that they acknowledge the pain or perceived pain will not kick in immediately. they acknowledge that tonight. saying it may take days or months before they feel the changes. they see the end game as the fiscal cliff and republicans will eventually raise taxes and close the loopholes. >> yeah. that is the calculation of both sides.

he will get republicans to come in and support new taxes. the republicans believe president obama will go past march 1 and tell us to look up to the sky. it will call any week now. i am not so sure of either scenario. the president realized republicans won't move by the first. they will see what they can do and soften the sequester. deal with new money to spend. that is the rhetoric.

what you talked about the transfer authority or flexability is the really upsetting part of this. we are facing the first when congress is known all along they could have, you know, come up with whatever plan they wanted to use the congressional authority as their own, legislative branch. now they say when they haven't come to an agreement we can't get to the president, we have to let the chiefs panic over our military readiness, because we can't. we can't agree to let them make their own decisions. they had democrats interested. they may still. at least privately. publicly the democrats get a lot of pressure from the white house. and from the leadership.

>> i suspect that is why the one democratic senator you are supposed to have on all of sudden was indisposed. mccain, graham, a.b. are right this is forfitting by the congress of the constitutionm duties to allocate where it goes to give president to president. this is not a failing of the congress in the abstract. this is failing of the senate by the democrats that refuse how to order, what things are cut and less important. to have rational, reallocation of the cuts. it's the senate and the democrats and the president who held out for 18 months. the republicans have been trying again and again two bills in the house, offering for weeks to open negotiations. on how to organize allocate the cuts.

i think that is why there is a lack of leadership. at this juncture with three days to go, i would respectfully disagree with mccain and graham and say at this point you have to give the authority to the president even though it's unpleasant. even though it hands him over all of this authority. it's only a one-shot deal. it's not going to be in perpetuity. unless they are perverse on this and stuff that hurts perpfully it would be less painful and more doable. >> bret: as i said at the beginning of the show, we can tell we're getting closer by the rhetoric and the words chosen.

>> we moved the bill twice. we should not move a third bill before the senate gets off their ass and begins to do something. >> he should understand who is sitting on the posterior. we're doing our best here to pass something. the spieger is doing nothing to try to pass anything over there. let's see what the house comes up with. it's their burden to give us what they are going to do. >> bret: well, the two bills that boehner and the republicans have been talking about all this time were bills passed one last summer and one in december to change the cuts to entitlement spending. the president threatened to veto it when they brought it up in the summer of last year. they is not going to happen. a lot of republicans are nervous. i would give away constitutional authority, but also they believe if they give it to the administration, the

cuts will be fake, phony and won't happen. the main appeal is it's already law and it will happen. that is why they do nothing. >> bret: next up, the politics of the sequester fight. stay with us. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire.

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all well're asking is they close loopholes for the well connected or companies or corporate jet owners who are all doing well and don't need tax loopholes to avoid laying off w kicking kids off head start. or reducing financial aid for college students.

>> now the time looms the president does exactly what he continued to do. he does a road show. the fundamental question he has to decide, does he want to be president of the political party or president of the united states? >> the politics of the sequester. we're back with the panel. charles? >> well, he did it again. he went to the corporate jet loophole. i did the math on the way over. if you collect for the hundred years it will not cover a month of obama spending. is that corporate jet loophole? >> if you collect it for a century it's less than what obama spends in a month. it's a joke and a way to make a point. the class war stuff. it's meaningless. it shows when he talks about loopholes all he is interested in, raising taxes so that he can spend. ordinarily, it's republicans who are interested in closing loopholes. since the '86 tax reform,

reagan, tip o'neil, and the leading democrat agreed on the ultimate in tax reform, which is you close loopholes, and you use that to lower rates. you get a quarter century of the economic expansion as a result. obama wants to close loopholes not so he can encourage economic expansion, with lower rates of taxation, he wants it so he can spend it on the entitlements. he is the entitlement president. this is about creating enough revenue, increasing american taxation so he can have an entitlement state in europe, which requires the european levels of taxation. he is not interested in debt or cutting or deficit. he wants to spend because he wants expanded state. that is what this is about. >> bret: a.b., breaking politics. harry reid filed cloture vote on democratic plan to replace sequester. this is the plan that came out of committee. it has not been voted on, on the floor.

this means they need 60 votes to move past that hurdle to get a simple majority. to vote on the democratic plan. he is allowing the republicans to move forward with their plan, which is the inhof-toomey, one of the options they will move forward. they have to get 60 vote threshold. that will all come together tomorrow. >> well, i am told by both side they don't think the bill will pass. >> bret: 60 votes. >> so it is not going to be -- it helps, because both sides need to place blame in advance of the equester -- sequester coming online. both sides are complicit. but president obama if there is any economic slide president obama will be accountable for. that he can blame republicans all he wants but if we start to feel something in mid-april that is going to be tough for the president as tough as it will be for the republicans.

at this point the best they can do is hop something happens in march where we get passed the package or discretionary spending and there is a deal that will deal with real money, cost of healthcare and entitlement spending. >> bret: will 55 democrats vote for democratic replacement of the sequester? >> i'm not sure about that. i don't like to make a prediction, because -- the senators tonight were saying they are looking for some democratic support for the flexibility bill. money one more time the debt added last year, because it's fascinating. $2.7 million a minute. $37,829 a second, according to the treasury deparent. this is a lot of wasted time on the sequester back and forth. you don't think it will amount

to much. basically, the next fight is continuing -- >> i don't see a big, nothing much changes on march 1. it continues all the way through the end of march. i would say the white house campaign is more sophisticated than just talking about corporate jets. on sunday afternoon, they had a conference call for reporters and they rolled out the state-by-state analysis. of what all would be cut. you know, chirp off head start, education cut. you know, drug programs, law enforcement, military. all sorts of cuts. embargoed it to 8:00 p.m. and the papers could get it out in the morning edition. all across the country on monday. local papers, all across the country in every state, big stories usually on the front page about what is going to be cut locally. good play. >> bret: that is it for panel. stay tune for tip for certain group of folks. this is so sick!

i can't believe your mom let you take her car out. this is awesome! whoooo! you're crazy.

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